Judge Ronald F. Frank, Case Number: 21TRCV00843, Date: 2023-08-22 Tentative Ruling

Judge: Ronald F. Frank, Case: 21TRCV00843, Date: 2023-08-22 Tentative Ruling

Case Number: 21TRCV00843 Hearing Date: April 10, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: April 10, 2024¿¿

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CASE NUMBER: 21TRCV00843

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CASE NAME: Falguni Adams; Richard Adams v. Danli Lai, et al.

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MOVING PARTY: Defendant, Daniel Lai

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RESPONDING PARTY: Plaintiffs, Falguni Adams and Richard Adams

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MOTION:¿ (1) Motion for Attorneys’ Fees

Tentative Rulings: (1) ARGUE

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I. BACKGROUND¿¿

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A. Factual¿¿

On November 12, 2021, Plaintiffs Falguni Adams and Richard Adams (“Plaintiffs”) filed this action against Defendant, Danli Lai, The Elite Group property Inspection Services, Inc., Carl Weustehube dba Tri-Star Realty, and DOES 1 through 20 alleging causes of action for: (1) Breach of Contract; (2) Negligence Per Se; (3) Negligence; (4) Construction Defect; (5) Breach of Implied and Express Warranties; (6) Fraudulent Misrepresentation and Fraudulent Concealment; and (7) Negligent Misrepresentation.

Defendant Lai filed a Motion for Summary Judgment on June 6, 2023, which was heard on August 22, 2023. After taking this matter under submission, this Court issued a ruling on December 20, 2023, in which this Court granted Defendant Lai’s Motion for Summary Judgment. Defendant Lai filed the Notice of Entry of Judgment on January 2, 2024. Since Defendant Lai prevailed on this action, he now moves for attorney’s fees under Civil Code § 1717, and pursuant to the agreement at issue in this case.

B. Procedural¿¿

On February 22, 2024, Defendant Lai filed a Motion for Attorney Fees. On March 28, 2024, Plaintiffs filed an opposition. On April 3, 2024, Defendant Lai filed a reply brief.

II. ANALYSIS¿

A. Legal Standard

Attorney’s fees are recoverable when authorized by contract, statute, or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).)

Pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10), attorney fees when authorized by contract, statute or law are allowable as costs and may be awarded upon a noticed motion pursuant to Code of Civil Procedure section 1033.5, subdivision (c)(5).

Where a contract specifically provides for attorney’s fees and costs incurred to enforce the contract, attorney’s fees and costs must be awarded to the party who is determined to be the prevailing party on the contract. (Civ. Code., § 1717, subd. (a).) “Reasonable attorney’s fees shall be fixed by the court and shall be an element of the costs of suit.” (Ibid.)

A prevailing party is defined as follows:

(4) “Prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant. If any party recovers other than monetary relief and in situations other than as specified, the “prevailing party” shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed, may apportion costs between the parties on the same or adverse sides pursuant to rules adopted under Section 1034.

(Code Civ. Proc., § 1032, subd. (a)(4).)

In determining what fees are reasonable, California courts apply the “lodestar” approach. (See, e.g., Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1332.) This inquiry “begins with the ‘lodestar,’ i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate.” (See PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1095.) From there, the “[t]he lodestar figure may then be adjusted, based on consideration of factors specific to the case, in order to fix the fee at the fair market value for the legal services provided.” (Ibid.) Relevant factors include: “(1) the novelty and difficulty of the questions involved, (2) the skill displayed in presenting them, (3) the extent to which the nature of the litigation precluded other employment by the attorneys, [and] (4) the contingent nature of the fee award.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132.)

The party seeking fees has the burden of documenting the appropriate hours expended and hourly rates. (City of Colton v. Singletary (2012) 206 Cal.App.4th 751, 784.) This burden requires competent evidence as to the nature and value of the services rendered. (Martino v. Denevi (1986) 182 Cal.App.3d 553, 559.) A plaintiff’s verified billing invoices are prima facie evidence that the costs, expenses, and services listed were necessarily incurred. (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682.)

B. Discussion

Here, Defendant Lai’s moving papers indicate that he is seeking attorneys’ fees for prevailing on his Motion for Summary Judgment in the total amount of $36,084. In Plaintiffs’ opposition, they argue that (1) Defendant Lai refused to participate in mediation, which should bar his motion for attorneys’ fees , and (2) a number of items requested in this motion are unreasonable, or at minimum, not sufficiently explained.

Mediation

Plaintiffs note that the Residential Purchase Agreement (“RPA”) at issue between the parties to this motion, contained an attorney fee provision. Pursuant to the terms of the RPA’s mediation clause, a party who refuses to participate in mediation, when requested, shall not be entitled to recover attorneys’ fees. (Declaration of Defendant Lai (“Lai Decl.”), Exhibit 1, RPA ¶ 22A.) Specifically, the RPA, paragraph 22A states:

The Parties agree to mediate any dispute or claim arising between them out of this Agreement or any resulting transaction, before resorting to arbitration or court action through the C.A.R. Real Estate Mediation Center for Consumers (www.consumermediation.org) or through any other mediation provider or service mutually agreed to by the Parties. The Parties also agree to mediate any disputes or claims with Broker(s), who, in writing, agree to such mediation prior to, or within a reasonable time after, the dispute or claim is presented to the Broker. Mediation fees, if any, shall be divided equally among the Parties involved. If, for any dispute or claim to which this paragraph applies, any party (i) commences an action without first attempting to resolve the matter through mediation, or (ii) before commencement of an action, refuses to mediate after a request has been made, then that Party shall not be entitled to recover attorney fees, even if they would otherwise be available to the Party in any such action…

(Lai Decl., Exhibit 1, RPA ¶ 22A.)

In Defendant Lai’s moving papers, he asserts in his original declaration that on February 5, 2021, he received a letter from RELAW, APC demanding $80,000 for Plaintiffs’ allegations against him and also demanding mediation pursuant to the RPA. (Lai Decl., ¶ 3.) Lai contends that he responded that he would be willing to engage in mediation and would like to employ Mimi Zemmelman, Phd as the mediator, as she was recommended by an acquaintance, as well as paid Dr. Zemmelman for an initial review of the matter and provided her with some documents related to the sale. (Lai Decl., ¶ 4.) Lai further asserts that he received an email from Plaintiffs’ attorney that he did not want to use Dr. Zemmelman as the mediator, and suggested a few mediators the next day, but Lai notes he did not agree to Plaintiffs’ counsel’s suggestions, as he was not familiar with the proposed mediators. (Lai Decl., ¶ 5.) Lai contends that he does not recall any further communication with Plaintiffs or their counsel regarding mediation before Plaintiffs filed their Complaint. (Lai Decl., ¶ 5.)

Counsel for Plaintiffs, John Tullis, also filed a declaration explaining the sequence of events (“Tullis Decl.”). In his declaration, Tullis notes that his March 17, 2024 email provided a list of recommended mediators in the Southern California area, and that although Defendant Lai acknowledges receipt of these emails in his declaration in support of the motion, he failed to communicate any disagreement with the proposed to Plaintiffs’ counsel (Tullis Decl., ¶¶ 4-5.) Further, Tullis asserts that on April 12, 2021, he sent another letter to Defendant Lai requesting he participate in mediation, or that the Plaintiffs would file a Complaint against him. (Tullis Decl., ¶ 6, Exhibit A.) Plaintiffs confirm that this letter was sent to the same email to which Defendant Lai conceded he had received the March 16th and 17th emails. However, Plaintiffs note that Defendant Lai never responded to any of these communications and thus, Plaintiffs claim, the defendant “refused” to engage in mediation.

In Defendant Lai’s supplemental declaration, he noted that he reviewed the April 12, 2021 letter attached by Tullis, and states he had never previously seen that letter, and after a search of his emails for it he has no record of receiving this letter. (Lai Supp. Decl., ¶ 2.)

For oral argument on this matter, the Court would like each side to address the following:

1. Is it a refusal to mediate if a party such as Defendant Lai here expresses a willingness to mediate but the opposing party does not accept the defendant’s proposed mediator?

2. Does the mediation pre-condition in the attorney fee clause require that a party affirmatively reject mediation or is the failure to respond to an offered group of proposed mediators sufficient to establish an implied refusal to mediate?

3. Does the “mail box rule” raising a presumption that a properly addressed letter transmitted with proper postage apply in the modern day when emails are used instead of “snail mail”?

4. Prior to the filing of this motion, had either party raised the issue of Lai’s alleged refusal to mediate or the lack of receipt of the April 12, 2021 letter?

When the Court resolves the threshold issue of the mediation precondition, if the Court finds the precondition is not a bar then the Court will set a further hearing on the computation and reasonableness issues.